Illinois health system signs $1.8 billion CountyCare contract

The Cook County Health and Hospitals System signed a five-year, $1.8 billion deal with a division of St. Louis-based Centene Corp. to administer CountyCare, its managed-care program for people on Medicaid.

The agreement with IlliniCare Health Plan is set to start July 1. Assuming 115,000 members in CountyCare, two-thirds of the contract amount will go toward reimbursing providers for medical care and prescription drugs. Roughly 21% will pay for managed-care services and services such as behavioral health, optometry and dentistry, and the remaining 12% will pay IlliniCare's administrative expenses. The system has enrolled about 100,000 people in the program to date.

CountyCare has been run as a pilot program to this point, with several vendors handling operations. On July 1, the health system plans to convert it into a Medicaid managed-care entity administered by one vendor, under the aegis of state Department of Healthcare and Family Services.

The selection of IlliniCare, which already has a separate managed-care contract with the state, was notable because it was the only company to submit a response to the health system's RFP. Crain's reported last month that the county tried to alert nine vendors to the request, but still three were unaware that it was open.

Under CountyCare, the health system will get a fixed amount per month for each enrolled person, from which it must cover their medical costs, including payment for claims. “Capitated” models are aimed at incentivizing hospitals and other health care providers to better manage the health of patients rather than simply billing for services rendered.

The program is seen as crucial to the financial health of the county system, which is anchored by Stroger Hospital, a safety net institution on Chicago's Near West Side.

Started in November 2012 under a waiver from the federal government, CountyCare allowed the health system to start signing up new Medicaid enrollees more than a year before the expansion of the state-federal program Jan. 1. President Obama's health reform law gave state's the option to expand Medicaid eligibility to adults with income up to 138 percent of the federal poverty level.